Monday, December 28, 2009

How can I use my and my spouse's retirement accounts to pay for my first home?

We are planning to buy an apartment soon and I was wondering if I can use my husband's ';frozen'; account, in addition to my own to pay for it. Does anyone know? Thank you very much.How can I use my and my spouse's retirement accounts to pay for my first home?
I assume that the accounts are IRAs. You can withdraw at any age, but there is usually (in addition to regular income tax), a 10% penalty. However, the first $10,000 per person is not subject to this penalty if it is used to buy your first home.





';Even if you are under age 59陆, you do not have to pay the 10% additional tax on up to $10,000 of distributions you receive to buy, build, or rebuild a first home. To qualify for treatment as a first-time homebuyer distribution, the distribution must meet all the following requirements.


It must be used to pay qualified acquisition costs (defined later) before the close of the 120th day after the day you received it.





It must be used to pay qualified acquisition costs for the main home of a first-time homebuyer (defined later) who is any of the following.





Yourself.





Your spouse.





Your or your spouse's child.





Your or your spouse's grandchild.





Your or your spouse's parent or other ancestor.





When added to all your prior qualified first-time homebuyer distributions, if any, total qualifying distributions cannot be more than $10,000.














If both you and your spouse are first-time homebuyers (defined later), each of you can receive distributions up to $10,000 for a first home without having to pay the 10% additional tax.





Qualified acquisition costs. Qualified acquisition costs include the following items.


Costs of buying, building, or rebuilding a home.





Any usual or reasonable settlement, financing, or other closing costs.








First-time homebuyer. Generally, you are a first-time homebuyer if you had no present interest in a main home during the 2-year period ending on the date of acquisition of the home which the distribution is being used to buy, build, or rebuild. If you are married, your spouse must also meet this no-ownership requirement.





Date of acquisition. The date of acquisition is the date that:


You enter into a binding contract to buy the main home for which the distribution is being used, or





The building or rebuilding of the main home for which the distribution is being used begins.';How can I use my and my spouse's retirement accounts to pay for my first home?
How or why is the account 'frozen?'
you cant but you could borrow on it give the bank the prof
Even if hubby's account wasn't frozen, this is a pretty dumb idea. Since the market typically returns 10-12% a year long-term, you would effectively be giving up that return, plus paying the fees %26amp; interest (albeit to yourself) and consequently paying something like 20% a year to borrow money for a mortgage.

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